• Mortgage rules in Virginia protect home buyers.mortgage image by hans slegers from Fotolia.com
  
  Every state, including Virginia, has unique laws governing how mortgages work within the state. Some of the laws are designed to protect the home buyer and those considering refinancing their mortgages from predatory lenders. Understanding these rules before purchasing a home in Virginia will save prospective buyers time and prevent frustration.
  
  

Title Theory State

• Virginia is a "title theory" state, which means that the title to a property remains in trust to the lender until the mortgage has been paid off in full. This means that the lender has the right to foreclose on the property if the borrower does not make payments. This foreclosure can be done without going to court through what is known as a "nonjudicial foreclosure" because of the rights granted through the mortgage.
  
  

Real Estate Transfer Disclosure Statement

• Before you make an offer on any property, your real estate agent must get a Real Estate Disclosure Statement from the seller. This document describes the property being sold, listing all included items, such as buildings and appliances, and discloses any major hazards or problems. This disclosure statement protects the buyer from unpleasant surprises after the transaction.
  
  

Real Estate Act

• Because of the Virginia Real Estate Act, borrowers with large mortgages are guaranteed a fixed interest rate rather than a variable interest rate. This ensures that monthly payments remain the same, avoiding a case where higher interest rates could result in payments the borrower can no longer make. It will potentially save borrowers money if interest rates increase; however, it could also cost money relative to a variable interest mortgage if interest rates go down.
  
  

Antipredatory Lending Laws

• In 2002, Virginia created a law targeted at predatory lending practices. This law caps the total fees that a lender can charge during the mortgage application process at 6 percent of the total loan principal. In addition, lenders are prohibited from giving home buyers a larger loan than they can be expected to handle.